ROCKFORD — It’s good to manage hotels on Boardwalk and Park Place and, in Rockford these days, along the East State Street/Interstate 90 corridor.

Hilton Garden Inn general manager Peter Johnson has beefed up his staff to keep pace with the uptick in business.

“We have hired more people on the food and beverage side and in catering,” said Johnson, who serves as president of the Rockford Area Hotel and Motel Association.

“We’ve hired new people and are filling positions that become open, and it’s really the same for all of the hotels. We’ve been very busy.”

Johnson credits the Rockford Area Convention & Visitors Bureau for helping keep him — and his colleagues — busy. Numbers tracked by the bureau show a notable increase in visitors to the Rockford area in the past four years.

The result is a bright spot on what has been a mostly glum economic picture for Boone and Winnebago counties, a region handcuffed by double-digit unemployment for nearly four years.

More visitors to the area means more visitor spending in the area. And that means more money for restaurants, shops, hotels and gas stations and more tax revenue for local governments. Not to mention jobs in the hospitality industry.

Numbers are up

Visitor spending in Winnebago County increased 11.8 percent, to $311 million, in 2011 compared with 2010, according to a report commissioned by the Illinois Office of Tourism. That’s the first time tourism spending has topped the $300 million mark in Winnebago County since the prerecession level of $300.6 million in 2007.

The county’s growth rate exceeded that of Illinois, where tourism spending rose 8.1 percent last year. Winnebago County’s performance even outpaced competitive markets for visitor spending, including Sangamon, Peoria, Will and DuPage counties.

Staff at the RACVB are booking more sports events and association meetings, resulting in more hotel business. Gross revenue from Rockford area hotels was $51.3 million in fiscal 2012, up 25 percent from the previous year.

The four-year trend in hotel room-night bookings in the area follows the same pattern. The number of room nights booked through the bureau’s efforts rose 91 percent to 102,397 in fiscal 2012, compared with 53,530 in fiscal 2009.

The RACVB board of directors met Sept. 26 to discuss the numbers behind the agency’s recent performance. The numbers also reveal what could be a concern: while the bureau is helping book more room nights at hotels, the number of room nights per event has declined for the second year in a row.

Consumers are smart, RACVB President/CEO John Groh said. They may attend a meeting or a sports tournament in Rockford and opt out of the preferred hotel rate that was locked in by the event planner and surf the Web for a cheaper rate at a competing hotel in the area.

Page 2 of 3 -
Identifying trends

In most cases, event attendance in the Rockford area is up or at least static, according to Zeitgeist Consulting, a firm the bureau commissions to help analyze its performance and identify market trends. However, event producers are booking smaller blocks of hotel rooms to avoid attrition fees that hotels charge when the event fails to yield the number of hotel room nights pledged.

“More and more, meeting planners are only negotiating rates but they’re not reserving blocks of rooms,” Groh said. “Another thing they’re doing is guaranteeing fewer rooms. They may need 400 rooms a night, but they only guarantee 200 or 300 rooms because they know that people are savvy and they’re going to book around the block. That’s a major issue we’re having with sports events right now.”

As this trend plays out, “hotels will say ‘I’m not even going to give you a block because you’re bringing 3,000 people to town. The hotels are going to fill up and there’s only so many rooms, the (visitors) are going to find us.’”

There is still much to analyze, Groh said, and the bureau may need to look at different metrics to ensure that their performance is measured accurately. An ongoing point of analysis, he noted, is whether the bureau should tweak its marketing spending on athletic events vs. meetings and conferences to maximize the return on investment those activities generate.

A downtown hotel?

Rockford lacks a convention center, which forces the tourism bureau to be creative when booking conferences, reunions and association meetings.

But the horizon looks bright for sports tournament business. The city is close to securing the money needed to transform the old Ingersoll factory downtown into an indoor athletics complex.

Rockford has millions of dollars in hand, is seeking a $4 million grant and can sell bonds backed by the city’s Redevelopment Fund to cover whatever funding gap remains for the $13.6 million endeavor.

City officials hope to start work next year for a potential 2014 opening of the sports complex, which would bolster the region’s tournament hosting capability.

The sports complex would gradually ramp up to accommodate 22 sports tournaments a year, attracting 100 teams, 80 of which the city estimates would come from outside Illinois. The result? An $8.4 million a year increase in visitor spending, $6.8 million of which would come from out-of-state residents.

What happens next could change the city’s hotel landscape.

“A downtown hotel is something that’s not fantasyland anymore. It’s realistic if the Ingersoll project were to happen,” Johnson said.

“That would make things somewhat competitive for the hotels on the east side, but I don’t think someone would put a big hotel downtown. It would be smaller, a boutique hotel or something like that.”

Page 3 of 3 -
Regardless, it would take a considerable sum to develop a downtown hotel, and Johnson said that may mean one of the larger, franchise hotel firms would be involved.